Pexapark Advises EKZ Renewables Ag And Axpo Solar Offtake Agreement, Third European Deal In Six Weeks

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Pexapark, a provider of software and advisory services for post-subsidy renewable energy sales, has advised on the recently-signed offtake agreement between EKZ Renewables AG, a Swiss renewable energy investor, and the Spanish subsidiary of energy trading firm Axpo. This deal is the second power purchase agreement (“PPA”) signed in the Iberian region, and third signed in Europe, that Pexapark has successfully supported in the past six weeks.

Renewable energy companies in the Iberian markets have taken a leading role in the development of fully or partially merchant wind and solar projects. In Spain, many projects have been commissioned in the absence of subsidies between 2017 and 2020. Portugal has been subsidy-free even longer, lifting feed-in-tariffs in 2012. In addition to world-record-breaking auctions, PPAs have become a prerequisite for organisations to efficiently hedge their energy risks from short to long-term.

Pexapark supported EKZ Renewables AG in evaluating different hedging strategies and negotiating the offtake agreement for their Algibicos solar project, which is due to be commissioned by the end of this year. The final agreement with Axpo was structured in order to allow EKZ Renewables AG to pilot their own electricity revenue management strategy related to the electricity generated by Algibicos, mitigating some key energy risks such as price fluctuations.

In Portugal, Pexapark recently worked with Wirtgen Invest, a German-based, family-owned investment company, to support their efforts to secure a PPA for 97MW of solar power operational and under construction. Pexapark set up a Request for Quote process with active offtakers in the Portugese market, and advised Wirtgen in the negotiation and optimisation of an offer from Holaluz, a Spanish green energy offtaker. Pexapark, Wirtgen Invest and Holaluz were able to materialise and sign the agreement within six weeks of the RfQ, a remarkable speed compared to standard PPA timelines.

Elsewhere in Europe, Pexapark also advised on a recent PPA for a 40MW wind farm in Finland between ABO Wind, a global renewable project developer, and Gasum, a Finnish state-owned gas and power company. As this project is still in construction and is due to come online in 2022, Pexapark provided an in-depth assessment of PPA structure and risks.

These new PPA deals demonstrate the continued resilience of renewable energy markets in the face of the pandemic. Based on data from PexaQuote, Pexapark’s award-winning software for tracking and analysing PPA prices and deals, the rate of new PPAs signed has recovered to pre-pandemic levels as prices increase and the market stabilises. Pexapark’s advisory team is currently involved in 10 processes for over 2,100 MW of assets across Europe.

Mathieu Ville, Deputy Head of PPA Transactions, Pexapark said: “These three PPAs show how renewables companies have adapted to post-subsidy regimes and how Pexapark helps them find their own way of hedging against the natural volatility within energy markets across Europe. We are proud to help bring these deals over the line and accelerate the buildout of new green capacity in a critical period for the energy transition.

“As the market continues to mature, we expect even more sophisticated PPAs like those signed by EKZ Renewables AG, ABO Wind, and Wirtgen to be closed in the coming months.”

While PPAs are starting to be increasingly recognised by the market as a fundamental step for post-subsidy renewable energy development, monitoring and controlling renewable energy sales and risks across the full lifetime of the project is crucial for organisations to succeed. Pexapark helps companies update their processes via both advisory and software solutions, and builds their capabilities in renewable energy risk management – creating a new “Operating System” for the post-subsidy market.

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